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Monday, September 27, 2021

Tuesday: Case-Shiller House Prices, Fed Chair Powell Testimony

by Calculated Risk on 9/27/2021 09:00:00 PM

From Matthew Graham at Mortgage News Daily: Highest Mortgage Rates in Nearly 3 Months

Mortgage rates continued somewhat higher on Monday as bond markets lost ground over the weekend, adding to the heavier losses seen on Thursday and Friday last week. ... This improves the outlook for the economy and further steels the resolve of the Federal Reserve to announce another instance of "tapering" (a reduction in the pace of the Fed's rate-friendly bond buying efforts). Unlike 2013, markets are much more prepared this time around, and in fact, we can credit tapering expectations for some of the weakness in rates seen earlier this year.

The average lender is at an eighth to a quarter of a percent higher in conventional 30yr fixed rates compared to the beginning of last week. [30 year fixed 3.14%]
emphasis added
Tuesday:
• At 9:00 AM ET, FHFA House Price Index for July. This was originally a GSE only repeat sales, however there is also an expanded index.

• Also at 9:00 AM, S&P/Case-Shiller House Price Index for July. The consensus is for a 20.0% year-over-year increase in the Comp 20 index for July.

• At 10:00 AM, the Richmond Fed manufacturing survey for September. This is the last of the regional surveys for September.

• Also at 10:00 AM, Testimony, Fed Chair Powell, Coronavirus and CARES Act, Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs

Freddie Mac: Mortgage Serious Delinquency Rate decreased in August

by Calculated Risk on 9/27/2021 04:50:00 PM

Freddie Mac reported that the Single-Family serious delinquency rate in August was 1.62%, down from 1.74% in July. Freddie's rate is down year-over-year from 3.17% in August 2020.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble, and peaked at 3.17% in August 2020 during the pandemic.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Fannie Freddie Seriously Delinquent RateClick on graph for larger image

Mortgages in forbearance are being counted as delinquent in this monthly report, but they will not be reported to the credit bureaus.

This is very different from the increase in delinquencies following the housing bubble.   Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes - and they will be able to restructure their loans once (if) they are employed.

Also - for multifamily - delinquencies were at 0.12%, down from 0.15% in July, and down from the peak of 0.20% in April 2021.

MBA Survey: "Share of Mortgage Loans in Forbearance Decreases to 2.96%"

by Calculated Risk on 9/27/2021 04:00:00 PM

Note: This is as of September 19th.

From the MBA: Share of Mortgage Loans in Forbearance Decreases to 2.96%

The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 4 basis points from 3.00% of servicers’ portfolio volume in the prior week to 2.96% as of September 19, 2021. According to MBA’s estimate, 1.5 million homeowners are in forbearance plans.

The share of Fannie Mae and Freddie Mac loans in forbearance decreased 3 basis points to 1.44%. Ginnie Mae loans in forbearance increased 3 basis points to 3.42%, and the forbearance share for portfolio loans and private-label securities (PLS) decreased 4 basis points to 6.91%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 1 basis point relative to the prior week to 3.24%, and the percentage of loans in forbearance for depository servicers decreased 4 basis points to 3.06%.

“The share of loans in forbearance continued to decrease last week, dropping below 3 percent for the first time since March 2020,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “However, there was a slight increase in the forbearance share for Ginnie Mae loans, and this increase was seen for both depository and IMB servicers. New forbearance requests and re-entries continue to run at a higher rate for Ginnie Mae loans as well as for portfolio and PLS loans, which include many delinquent FHA, VA, and USDA loans that have been bought out of Ginnie Mae pools.”
emphasis added
MBA Forbearance Survey Click on graph for larger image.

This graph shows the percent of portfolio in forbearance by investor type over time.  Most of the increase was in late March and early April 2020, and has trended down since then.

The MBA notes: "Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained the same relative to the prior week at 0.05%."

September 27th COVID-19: Data reported on Monday is always low, and will be revised up as data is received

by Calculated Risk on 9/27/2021 03:58:00 PM

The CDC is the source for all data.

According to the CDC, on Vaccinations.  Total doses administered: 390,664,923, as of a week ago 386,237,881, or 0.63 million doses per day.

COVID Metrics
 TodayWeek
Ago
Goal
Percent fully Vaccinated55.4%54.7%≥70.0%1
Fully Vaccinated (millions)183.9181.7≥2321
New Cases per Day395,228134,500≤5,0002
Hospitalized375,11286,009≤3,0002
Deaths per Day31,3321,508≤502
1 Minimum to achieve "herd immunity" (estimated between 70% and 85%).
2my goals to stop daily posts,
37 day average for Cases, Currently Hospitalized, and Deaths
🚩 Increasing 7 day average week-over-week for Cases, Hospitalized, and Deaths
✅ Goal met.

IMPORTANT: For "herd immunity" most experts believe we need 70% to 85% of the total population fully vaccinated (or already had COVID).  

KUDOS to the residents of the 13 states and D.C. that have achieved 60% of total population fully vaccinated: Vermont at 69.3%, Massachusetts, Maine, Connecticut, Rhode Island, Maryland. New Jersey, Washington, New York, New Mexico, New Hampshire, Oregon, Virginia, and District of Columbia at 60.0%.

The following 21 states have between 50% and 59.9% fully vaccinated: Colorado at 59.2%, California, Minnesota, Hawaii, Delaware, Pennsylvania, Wisconsin, Florida, Nebraska, Iowa, Illinois, Michigan, South Dakota, Kentucky, Arizona, Kansas, Texas, Nevada, Alaska, Utah and Ohio at 50.1%.

Next up (total population, fully vaccinated according to CDC) are North Carolina 49.6%, Indiana at 48.3% and Montana at 48.2%.

COVID-19 Positive Tests per DayClick on graph for larger image.

This graph shows the daily (columns) and 7 day average (line) of positive tests reported.

Mortgage Rates Increasing

by Calculated Risk on 9/27/2021 12:48:00 PM

Today, in the Newsletter: Mortgage Rates Increasing

Excerpt:

With the ten year yield close to 1.50%, and based on an historical relationship, 30-year rates should currently be around 3.4%.

Mortgage News Daily reports that the most prevalent 30 year fixed rate is now at 3.13% for top tier scenarios. So mortgage rates are a little lower than expected.

The graph shows the relationship between the monthly 10 year Treasury Yield and 30 year mortgage rates from the Freddie Mac survey.

Housing Inventory Sept 27th Update: Inventory Down Slightly Week-over-week, Up 41% from Low in early April

by Calculated Risk on 9/27/2021 10:41:00 AM

Tracking existing home inventory will be very important this year.

Lumcber PricesClick on graph for larger image in graph gallery.

This inventory graph is courtesy of Altos Research.


As of September 24th, inventory was at 433 thousand (7 day average), compared to 568 thousand for the same week a year ago.  That is a decline of 23.8%.

Compared to the same week in 2019, inventory is down 55% from 963 thousand.

A week ago, inventory was at 436 thousand, and was down 23.8% YoY.   Three weeks ago inventory was at 437 thousand (the peak for the year so far).

Seasonally, inventory bottomed in April (usually inventory bottoms in January or February).  Now inventory may be peaking for the year.   Inventory was about 41.1% above the record low in early April.

Key question: Usually inventory peaks in the Summer, and then declines into the Fall.  Will inventory follow the normal seasonal pattern, or will inventory continue to increase over the coming months?  This will be important to watch for house prices and housing activity.  

Mike Simonsen discusses this data regularly on Youtube.  

Altos Research has also seen a significant pickup in price decreases - now well above the level of a year ago - but still below a normal rate for September.

Seven High Frequency Indicators for the Economy

by Calculated Risk on 9/27/2021 08:34:00 AM

These indicators are mostly for travel and entertainment.    It will interesting to watch these sectors recover as the pandemic subsides.

----- Airlines: Transportation Security Administration -----

The TSA is providing daily travel numbers.

This data is as of September 26th.

TSA Traveler Data Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red).

The dashed line is the percent of 2019 for the seven day average.

The 7-day average is down 24.5% from the same day in 2019 (75.5% of 2019).  (Dashed line)

Note that the dashed line hit a pandemic high over the Labor Day weekend - probably due to leisure travel, but is now below pre-holiday levels.

The red line usually increases seasonally after Labor Day.  But, so far, it appears business traffic is soft.

----- Restaurants: OpenTable -----

The second graph shows the 7-day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

IMPORTANT: OpenTable notes: "we’ve updated the data including downloadable dataset from January 1, 2021 onward to compare seated diners from 2021 to 2019, as opposed to year over year." Thanks!

DinersThanks to OpenTable for providing this restaurant data:

This data is updated through September 25, 2021.

This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."

Note that this data is for "only the restaurants that have chosen to reopen in a given market". Since some restaurants have not reopened, the actual year-over-year decline is worse than shown.

Dining picked up for the Labor Day weekend, but declined after the holiday.  The 7-day average for the US is down 11% compared to 2019.

----- Movie Tickets: Box Office Mojo -----

Move Box OfficeThis data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Blue is 2020 and Red is 2021.  

The data is from BoxOfficeMojo through September 23rd.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.

Movie ticket sales were at $63 million last week, down only about 55% from the median for the week.

----- Hotel Occupancy: STR -----

Hotel Occupancy RateThis graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

The red line is for 2021, black is 2020, blue is the median, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020).

This data is through September 18th. The occupancy rate was down 11.6% compared to the same week in 2019. The comparison to 2019 was difficult this week due to the timing of Labor Day.

Notes: Y-axis doesn't start at zero to better show the seasonal change.

With solid leisure travel, the Summer months had decent occupancy - but it is uncertain what will happen in the Fall with business travel - usually weekly occupancy increases to around 70% in the weeks following Labor Day due to renewed business travel.

----- Gasoline Supplied: Energy Information Administration -----

gasoline ConsumptionThis graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.

Blue is for 2020.  Red is for 2021.

As of September 10th, gasoline supplied was down 4.8% compared to the same week in 2019.

There have been five weeks so far this year when gasoline supplied was up compared to the same week in 2019.

----- Transit: Apple Mobility -----

This graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.

There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. However the index is set "relative to its weekday-specific average over January–February", and is not seasonally adjusted, so we can't tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer.

Apple Mobility Data This data is through September 25th for the United States and several selected cities.

The graph is the running 7-day average to remove the impact of weekends.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data directions requests, public transit in the 7 day average for the US is at 119% of the January 2020 level. 

New York City is doing well by this metric, but subway usage in NYC is down sharply (next graph).

----- New York City Subway Usage -----

Here is some interesting data on New York subway usage (HT BR).

New York City Subway UsageThis graph is from Todd W Schneider. This is weekly data since 2015. 

Most weeks are between 30 and 35 million entries, and currently there are clsoe to 15 million subway turnstile entries per week - and moving up recently.

This data is through Friday, September 24th.

Schneider has graphs for each borough, and links to all the data sources.

He notes: "Data updates weekly from the MTA’s public turnstile data, usually on Saturday mornings".

Sunday, September 26, 2021

Sunday Night Futures

by Calculated Risk on 9/26/2021 07:10:00 PM

Weekend:
Schedule for Week of September 26, 2021

The Home ATM

Monday:
• 8:30 AM ET, Durable Goods Orders for August from the Census Bureau. The consensus is for a 0.7% increase in durable goods orders.

• 10:30 AM, Dallas Fed Survey of Manufacturing Activity for September.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 7 and DOW futures are up 92 (fair value).

Oil prices were up over the last week with WTI futures at $74.53 per barrel and Brent at $78.55 per barrel. A year ago, WTI was at $40, and Brent was at $41 - so WTI oil prices are UP 90% year-over-year (oil prices collapsed at the beginning of the pandemic).

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.18 per gallon. A year ago prices were at $2.18 per gallon, so gasoline prices are up $1.00 per gallon year-over-year.

The Home ATM, aka Mortgage Equity Withdrawal (MEW)

by Calculated Risk on 9/26/2021 04:06:00 PM

In the Newsletter I have The Home ATM

Excerpt:

In Q2 2021, mortgage debt increased $223 billion, the largest quarterly increase since 2006.
...
The bottom line is the recent increase in MEW is not concerning - it is far less as a percent of disposable personal income than during the bubble, and most homeowners have substantial equity.

Saturday, September 25, 2021

Newsletter Articles this Week

by Calculated Risk on 9/25/2021 02:11:00 PM

At the Calculated Risk Newsletter this week:

Comments on August New Home Sales; Record 105 thousand homes have not been started

Existing Homes: Some Regional Differences Appear; Final August Update for Local Housing Markets

Existing-Home Sales Decreased to 5.88 million in August; Sales will be down year-over-year for the remainder of 2021

Housing Starts increased to 1.615 Million Annual Rate in August; Most Multi-Family Units Under Construction Since 1974

This will usually be published several times a week, and will provide more in-depth analysis of the housing market.


The blog will continue as always!

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